By Austin Opara
What are the advantages and disadvantages of buying a life insurance policy for your child? And how can you buy life insurance for your children?
No one looks forward to losing a child but life happens and it’s best we are prepared for anything that happens to us. That’s why life insurance companies offer policies for minors.
These coverages are often whole life insurance policies that build up a cash value that you can access in the future. You can use the money to pay for education or other costs.
Many parents are often not certain if it’s best to buy an insurance policy for their kids. There’s no clear answer to whether buying a life policy for a minor is good or bad it all depends on the personal decision of parents.
Related: Global Trends in the Life Insurance Industry
You may need to check these advantages and disadvantages of buying an insurance policy for your kids below:
Advantages of Buying a Life Insurance Policy for Your Kids
1. a child with a chronic disease may not be eligible for life insurance later. If they have insurance as a healthy child, they are now covered for the duration of the policy. They can continue the coverage even after getting sick. This isn’t certain but possible.
2. If the unexpected happens, you will have money to pay the final expenses and medical bills. Funerals and hospital stays are expensive. Families with little children don’t usually have such a large sum of money but a life insurance policy can relieve them of the burden during the difficult times.
3. Some life insurance coverages have a cash value feature that you can borrow money from when you need to pay for things like children’s tuition fees.
Related: Life Insurance for Pregnant Women
Disadvantages of Buying a Life Insurance Policy for Your Kids
1. Children with defects may not be covered. Even if you do decide you’ll buy a policy, there’s no guarantee that you can post-birth.
2. Adults earn a salary but children rarely add to the family finances. Also, the emotional cost of losing a child cannot be determined. But the long-term financial loss to your family is negligible.
3. The price of life insurance for minors is high compared to that of adults. If you want to buy it for savings, you might be better off putting money in an educational savings account.
Related: How Much Life Insurance Does My Child Need?
Now that we’ve discussed the pros and cons of life insurance for minors, I’ll advise you to consider your family health history and financial stand then talk to a financial advisor on things you that aren’t clear to you. I wish you good luck with your decision.
